Kaiser Hospitals Buys Bankrupt Webvan’s E-commerce Technology

During the dotcom boom, procurement managers in the health sector were told they risked being left behind if they failed to instantly harness the opportunities of e-commerce.

But thanks to the continuing dotcom downturn, the more cautious "wait and see" approach adopted by many appears to have paid off, with some healthcare organisations now able to pick up valuable technology assets at knock-down prices.

Last week US hospital chain Kaiser Foundation Hospitals showed that bargains can be picked up, when it successfully bid for key e-commerce and supply chain technology assets of the bankrupt online US grocer Webvan.

Kaiser, a division of healthcare giant Kaiser Permanente, will pay a mere $2.65m for Webvan’s software platform and other technology assets. According to E-commerce Times the same technology cost Webvan up to $100m to develop.

Oakland, California-based Kaiser will also take over Webvan’s fully automated Oakland distribution centre. Kaiser agreed to pay $1.4m for the technology at that facility and agreed to take over Webvan’s lease.

Part of Webvan’s original growth strategy was to build a nationwide infrastructure of distribution facilities to enable fast and inexpensive delivery of groceries.

While Kaiser did not specify its plans for the Webvan assets, it is likely to use the distribution centre to stock health care items for its network of hospitals in the Oakland area.

The hospital network is part of Kaiser Foundation Health Plan, a health maintenance organization (HMO) with 8m members and 11,000 doctors.

Webvan, founded in 1999, burned through an astonishing $850m in funding before shutting down in July. The company’s stated objective was to do nothing less than to turn the US retail establishment on its head through lavish investment in supply chain technology that would deliver unmatchable efficiency gains.

Webvan has been in selling-off mode for several months, even before it filed for bankruptcy in mid-July.